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A) II and III only. B) I, II, and III. C) I only. D) II only. E) III only. 7) Policies that would reduce suburban sprawl include I. Higher gas taxes II. Increased development fees III. Agricultural subsidies A) I only. B) II only. C) III only. D) I and II only. E) I, II and III. 8) Which of the following has NOT been a major contributor to decentralization of cities over the past 100 years. A) Advances in the technology of high-rise building construction. B) The rise of the car. C) The development of highway systems. D) The rise of truck transport for local shipping by manufacturers. E) The rise of truck transport for long-distance shipping by manufacturers. 9) According to Ed Glaeser, in Triumph of the City, which of the following statements is/are true? 3 I. Allowing low-rise historic buildings to be replaced with high-rise apartment buildings will lower the cost of living. II. No historic buildings should ever be preserved, when it is profitable to replace them with newer buildings. III. Restrictions on development in anti-development cities will lead to sprawl in prodevelopment cities. A) I only. B) II only. C) III only.
D) I and III only. E) I, II and III. 10) According to Glaeser, the key innovations that made skyscrapers feasible were: I. Steel beams. II. Elevators III. Thick lower walls. A) I only. B) II only. C) III only. D) I and II only. E) I, II and III. End Section 1. Section 2: Short Answers 1) (10 points total) 4 a) 7 points Consider the case of two cities, Victoria and Vancouver. Utility per worker curves are given for each city in the diagram below, as are current (mythical) populations. Suppose that the city of Victoria pursues an innovative traffic management program that leads to shorter commutes which increases the quality of life for its residents. There is no policy change in Vancouver. Assume the utility per worker curve for Victoria remains below that of Vancouver after the policy change. Using the diagram below, clearly illustrate the shift in equilibrium populations in each city that results from the policy change. Clearly denote the pattern of migration that will occur between the two cities. Clearly label the new equilibrium population in each city and the new equilibrium utility per worker. Assume that there are no other places to live in the region, and that migration can only occur between the two cities (people cannot leave or join the region) Only the utility per worker curve for Victoria will shift, and it shifts up. Overnight, utility in Victoria rises from u to u’, while utility in Vancouver remains at u. This puts us out of equilibrium, so people begin migrating from Vancouver to Victoria. People 5 move out of Vancouver and into Victoria, driving utility up in Vancouver and down in Victoria (since each city is on the downward sloping side of its utility curve). We reach equilibrium
Page 1 and 2: ECON 312 Midterm Solutions VERSION
Page 3: A) $20,000 B) $47,500 C) $50,000 D)
Page 7: to farmers outbidding residential a

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